Iran Warns of Retaliation Against Any Future U.S. Military Action in the Gulf

U.S. President Donald Trump has rejected Iran’s latest response to a U.S.-backed peace proposal, calling it “totally unacceptable” and deepening concerns over renewed instability in the Gulf region.

The rejection comes amid rising tensions involving Iran, Israel and Western powers, with growing fears that diplomacy may be losing momentum despite continued public references to negotiations from both Washington and Tehran.

Iranian President Masoud Pezeshkian has warned that Tehran would retaliate against any future U.S. military action and opposed the deployment of foreign naval forces in the Strait of Hormuz, one of the world’s most critical energy shipping routes.

Journalist and author Lynne O’Donnell said the latest developments leave diplomacy “alive in theory but weakened in practice,” arguing that both sides are increasing pressure while still publicly supporting negotiations.

According to O’Donnell, Washington appears to believe that pressure tactics are producing results and is unwilling to compromise prematurely, while Iran is attempting to avoid appearing to negotiate under coercion. She added that oil prices surged around 4% in Asian and U.S. trading following Trump’s rejection of Tehran’s response.

Iran’s proposal reportedly included demands related to sanctions relief, the release of frozen assets, and the reduction of foreign naval deployments in the Strait of Hormuz. O’Donnell said Tehran’s proposals were framed as a negotiating platform rather than a surrender, noting that Iran appears willing to discuss inspections, de-escalation and limits on its activities, but not the complete dismantling of its uranium enrichment capabilities.

She said that remains a fundamental sticking point for Israel and many officials in Washington, who argue that any remaining enrichment capacity leaves Iran too close to developing nuclear weapons capability.

Israeli Prime Minister Benjamin Netanyahu has meanwhile signaled that Israel’s campaign against Iran is not over, saying the country’s enriched uranium stockpile “must be taken out.”

O’Donnell cautioned against interpreting Netanyahu’s remarks as an immediate indication of a ground invasion, saying Israel is more likely signaling an expansion of covert operations, infrastructure strikes and sustained military pressure rather than deploying large numbers of troops inside Iran.

She warned, however, that the longer the conflict continues, the greater the risk of “mission creep” and broader escalation.

Trump also declined to rule out military measures when questioned on the issue, maintaining strategic ambiguity that analysts say may be intended to preserve leverage ahead of any future negotiations.

The worsening crisis has also intensified fears of wider economic fallout. Several governments have begun implementing energy-saving and transport contingency measures as concerns grow over possible disruptions in the Strait of Hormuz, through which roughly 20% of the world’s energy supplies pass.

O’Donnell said the impact extends beyond oil markets, noting sharp increases in the prices of sulfur, urea, cotton, rubber, rice, wheat, wool and palm oil — commodities heavily dependent on Gulf shipping routes. She warned that rising food and fertilizer costs could eventually affect hundreds of millions of consumers worldwide.

The diplomatic dimension of the crisis is also expected to feature prominently during Trump’s upcoming visit to China from May 13 to 15, where he is expected to discuss Iran with Chinese President Xi Jinping.

O’Donnell said China maintains significant economic ties with Iran and possesses important communication channels with Tehran, but argued Beijing’s leverage remains limited. She said China’s primary focus is likely to remain regional stability and energy security rather than direct intervention in the conflict.

Meanwhile, Britain and France are reportedly moving naval assets toward the Gulf region. Iran has warned both countries that increased military involvement could trigger a “decisive response.”

According to O’Donnell, London and Paris are likely seeking to protect shipping lanes, reassure regional allies and support freedom of navigation without becoming directly involved in the conflict itself. She said the deployments also reflect growing international concern that instability in the Gulf is now affecting the global economy far beyond the Middle East.